NEW YORK (MarketWatch) -- Gold futures rose Monday, bouncing back from a seven-session swoon, as oil prices rose and signs of stability in the financial system seemed to halt heavy selling of assets by funds strapped for cash.
Gold's gains, however, were limited by a stronger dollar, which tends to put downward pressures on dollar-denominated commodities prices.
Gold for December delivery gained $5.30, or 0.7%, to $795.60 an ounce in early electronic trading. It rose to as high as $811.80 overnight. The metal had lost 8.3% last week, its biggest weekly decline in two months, as investors sought out cash amid the global markets' turbulence.
"Gold was wrongly being treated as just another commodity akin to pork bellies or lead as the 'dash for cash' ... gathered pace," said Mark O'Byrne, executive director of Gold & Silver Investments, in emailed comments.
"Many realize that the U.S. and global economy is on the verge of a sharp recession and thus realize the importance of staying diversified," he added. Investors tend to buy gold as a safe haven against economic slowdown.
Gold's gain followed rallies in global stock markets and crude oil futures.
Shares in Europe, Asia and on Wall Street advanced as government efforts to stabilize the financial system continued to boost confidence. See Market Snapshot. Crude-oil futures rebounded after having fallen 8% last week. See Futures Movers.
Mining stocks in the S&P 500 index were mostly higher. The Amex Gold Bugs Index gained 1%, led by the likes of Golden Star Resources Iamgold Corp. and Newmont Mining Shares of Freeport McMoRan Copper & Gold which is due to report earnings on Tuesday, traded up 4%.
Gains in gold futures, however, were limited by a rising dollar, which tends to reduce gold's appeal as an alternative investment. The dollar surged against the euro, British pound, and Japanese yen. See Currencies.
On exchange-traded funds, gold in the SPDR Gold Trust, the largest gold exchange-traded fund, stood at 756.86 tons Friday, unchanged from a day ago, according to the latest data from the fund. Gold at SPDR hit record high of 770.64 tons on Oct. 10.
The SPDR Gold Trust rose 0.4% to $77.50 on the New York Stock Exchange.
In other metals action, December silver rose 2.6% to $9.58 an ounce. January platinum rose 1.4% to $893 an ounce, and December palladium rose 3.7% to $181 an ounce.
Copper for December delivery fell 2.6% to $2.1240 a pound.
In spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $795 an ounce Monday afternoon local time, up $10.50 from Friday afternoon
